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Unit 1 1.a) A void agreement had a specific event, time and/or start that made the agreement void.

You may write a check and it is given back to you with void written on it because of any reason you can think of. 1- Prohibited: A void agreement is not prohibited by law. 2- Punishable: A void agreement is not punishable. 3- Nature: A void agreement is not illegal agreement. 4- object: The object of void agreement is not illegal. 5- Collateral agreement: A collateral agreement to a void agreement is enforceable. 6- Restoration of benefits: In void agreement the money received must be returned to the other party. A illegal agreement is one that on it's face is not legal, such as you put a contract out on someones pet. That agreement would be illegal from the start so in effect there is no contract. Illegal agreement: 1- Prohibited: An illegal agreement is prohibited by law. 2- Punishable: An illegal agreement is punishable. 3- Nature: An illegal agreement is also void agreement. 4- object: The object of illegal agreement is illegal. 5- Collateral agreement: A collateral agreement to an illegal agreement is not enforceable. 6- Restoration of benefits: In illegal agreement the money paid cannot be claimed back. 1.b) A “void” contract is not recognized by law because the agreement cannot be enforced by either party. Technically, a void contract is a “no contract” situation- it is as if a contract was never formed, and neither party will be able to recover in the event of a breach. The contract is invalid from the beginning, even at the negotiation or signing stage. This usually involves performing a duty that is illegal or impossible to perform. On the other hand, a “voidable” contract is a valid contract. Usually only one party is bound to the contract terms in a voidable contract. The unbound party is allowed to repudiate (cancel) the

6. Example: A enters into a hotel and eats some food. Sec. 4. . It is a true contract. 11. 3. It is not created by the operation of the contract. 7. X spends Rs. Quasi Contracts 1. o The agreement must not expressly be declared to be void. Quasi contracts are also known as “constructive contracts” or “certain relations resembling those created by contracts”. defines contract: “an agreement enforceable by law is a contract”. 8. always there is an agreement between the parties. the parties must give their consent to it. 2. It is created by the operation of the contract. Moved by the pitiable condition of the boy-B. 10. X can claim this amount from A and his property. 2(h) of the Indian contract act. In contract. 3. 1. In contract. In contract. It is imposed by law. at which time the contract becomes void. The consumers purchase the goods and services from the shop-owners. 10. whereas with a voidable contract. 4.c) Contracts 1. 1872. 2. It is the liability of A to pay the consideration for food. Essentials: o Free consent. In quasi-contract. A quasi-contract is not a real contract. o The parties must be competent. Thus the meaning of “contract” is a drawing together of two or more minds to form a common intention giving rise to an agreement”. 9. This typically involves situations where only one party has committed a breach. Example: A is a lunatic.for B‟s treatment. the liability exists independent of the agreement and rests upon equity. although contract can be “voided” at the election of the unbound or non-breaching party. The word “contract” is divided from the Latin “contractum” which gives meaning “drawn together” or “consensus ad idem (identity of minds). met an accident. 5. there is no agreement between the parties. It is right in rem. 5. justice and good conscience. A contract is a contract between two parties. the liability exists between the parties by the terms of the parties. 6. He has some property. and o If the law in force requires. o There must be lawful consideration and lawful object.contract. The contract is implied in fact. 1. and also right in personam. performance is still possible. It is a contract. always there is an agreement between the parties. Where as in quasi-contract. Where as in quasi-contract. it must be registered.000/. B-son of A. The main difference between the two is that a void contract cannot be performed under law. It is an implied contract. In contract. the parties do not consent. Examples: A sells his house to B for certain consideration.

” The Offer to Perform or Tender The offer to perform the contract is called Tender. A tender of money must be of the exact sum due. strictly available against a person and is not available against the entire world. 9. to be legally valid. Half of the printing work is completed. 8. only. “The parties to a contract must either perform. A tender coupled with Example A passenger on a bus offers a rupee note for the fare which is 10p.e. What would be his position? Then came the doctrine of “quasi-contracts”. He stops the work. Then B finds that the book is libelous one and he may be prosecuted by the state. .Sec. It must be unconditional. 1. Essentials: o It is imposed by law. 38 .e. Lord Mansfield explained that law as well as justice should try to prevent “unjust enrichment”. Offer to perform or Tender may be called attempted performance. It is right in personam. or offer to perform. „their respective promises. 11. 2. A tender. Bireswar v. Example: A. It gives reasonable remuneration for the services actually rendered by B.7. It is a quasi-contract. or of any other law. must fulfill the following conditions. He explains: “it is clear that any civilized system of law is bound to provide remedies for cases of what has been called unjust enrichment or unjust benefit.a publisher entrusts to B a printer to print a book. Para 1. It is not created by contract. Salmond defines quasi contracts: “there are certain obligations which are not in truth contractual in the sense of resting on agreement. 10. The Emperor. enrichment of one person at the cost of another. o It is a right in personam. I. and o It is raised by a legal fiction. It is not a valid. I. another which it is against conscience that he should keep. or some benefit derived from. unless such performance is dispensed with or excused under the provisions of this act. B is entitled to get reasonable remuneration from A for the work completed. tender because it imposes condition on the acceptance of the tender viz the return of the balance out of the rupee. Here it becomes “a contract implied in law”. to prevent a man from retaining the money of. of the Contract Act lays down that. Section 37. i.a) A contract creates legal obligations . Each party must perform or offer to perform the promise which he has made.”Performance of a contract” means the carrying out of these obligations. Such remedies in contract or tort. a condition is no tender. o The person who incurs expenses is entitled to receive money (unjust enrichment). but which the law treats as if they were”. and are now recognized to fall within a third category of the common law which has been termed as quasi-contract or restitution”.e.

2.Time for performance without application “Where. place. And the promisor has undertaken to perform it without application by the promisee. What is proper time and place. But „of course. where time is specified “When a promise is to be performed on a certain day. 3. 3. Example : D promises to deliver goods at B‟s warehouse on the first January. a promisor is to perform his promise without application by the promisee. a question of fact”Sec. and no time for performance is specified. business. by the contract.time and. is. am. Nabagopal. They are as follows 1. the promisor may perform it at any time during the usual hours of business on such day and at the place at which the promise ought to be performed”-Sec. D has not performed his promise. not by any foreign money. the engagement must be performed within a reasonable time” “Explanation-The question what is a reasonable time. in each particular case. 4: The tender must be made at a proper time and place. must be in legal tender money. Jagat v.b) The time and place of performance General Rules The time and the place of performance of a contract are matters to be determined by agreement between the parties to the contract. or by promissory note or cheque. 47.. it is the duty of the promisee to apply for performance at a proper place and within the usual hours of . is not a valid tender. depends upon the intention of the parties and the provisions of Sections 46-50 of the Act. 46. a receipt may be demanded after a tender has been accepted.” . A tender to pay conditionally upon the other party doing something such as giving a release or accepting the other amount in full satisfaction of all demands.. 2. On that day D brings the goods to B‟s warehouse but after the usual hour for closing -it and they are not received. the promisor has not undertaken to perform it without application by the promisee. 2. A tender money.In sections 46 to 50 of the Indian Contract Act certain general rules have been laid down regarding the time and place of performance. Application for performance to be at proper time and place “When a promise is to be performed on a certain day.

to appoint A reasonable place for the performance. 48.“Explanation-The question `what is a proper time and place‟ is. in each particular. PERFORMANCE WITHIN STIPULATED TIME Rules Section 55 of the Contract Act lays down certain rules . Example : D undertakes to deliver a thousand mounds of jute to B on a fixed day. and to perform it at such place. In contracts where time is -not of the essence of the contract. failure to perform within the. . ” Sec. D must apply to B to appoint a reasonable place for the purchase of receiving it. In such cases.”-Sec. case. 4. 2. the promisee may accept performance after the fixed time but if he does so he cannot claim compensation unless he gives notice of his intention to claim compensation at the time of accepting the delayed performance.regarding the effects of failure to perform a contract within the stipulated time. 50. it is the duty of the promisor to apply to the promisee to appoint a reasonable place for the performance of the promise. 49. of it. “When a promise is to be performed without application by the promisee. a question of fact.”-Sec. . and no place is fixed for the Performance. 5. the contract (or so much of it as remains unperformed) becomes voidable at the option of the promisee. fixed time does not make the contract voidable. 3. if there is failure to perform within the fixed time. .manner and time prescribed or sanctioned by promisee „ “The performance of any promise may be made in any manner or at any time which the promisee prescribes or sanctions. In contracts where time is of the essence of the contract. They are as follows : 1. but the promisee is entitled to get compensation for any loss occasioned to him by such failure. and must deliver it to him at such place.

pledge or other disposition of the goods made by the mercantile agent when acting in the ordinary course of business of a mercantile agent is. 26 (1) Subject to this Act. he will not be allowed to go back on it when it would be unjust or inequitable for him to so. the property in the goods stolen revests in the person who was the owner of the goods. any sale. the property in the goods does not revest in the person who was the owner of the goods. the protection of property. Two principles are competing at law: 1. and 2. despite any intermediate dealing with them. the buyer acquires no better title to the goods than the seller had. or that person's personal representative. as valid as if the mercantile agent were expressly authorized by the owner of the goods to make the sale.” Coke. CA at 241 per Lord Denning MR. 59 (1) If a mercantile agent is. (2) Despite any enactment to the contrary. unless the owner's conduct precludes the owner from denying the seller's authority to sell. if the person taking under the disposition acts in good faith. the protection of commercial transactions and in particular the person who takes in good faith. merely because of the conviction of the offender. the buyer acquires no better title to the goods than the seller had. subject to this Act. in possession of goods or of the documents of title to goods." Moorgate Mercantile v Twitchings [1976] 1 QB 225. 26 (1) Subject to this Act. with the consent of the owner. and has not at the time of the disposition notice that the person making the disposition has not authority to make it. whether by sale in market overt or otherwise. Sales by mercantile agent. pledge or other disposition. Estoppel. if goods have been obtained by fraud or other wrongful means not amounting to theft. and who does not sell them under the authority or with the consent of the owner. 1. . 29 (1) If goods have been stolen and the offender is prosecuted to conviction. by his words or conduct. “An estoppel is where a man is concluded by his own act or acceptance to say the truth. "a principle of justice and equity.Unit II 3) No one can transfer a better title in property than he himself has. SGA s. and who does not sell them under the authority or with the consent of the owner. has led another to believe in a particular state of affairs. or that person's personal representative. if goods are sold by a person who is not the owner of them. It comes to this: when a man. if goods are sold by a person who is not the owner of them. unless the owner's conduct precludes the owner from denying the seller's authority to sell.

A notice of transfer to the creditor is not Informing the creditor about the assignment . 3. of the goods or documents of title under any sale. or by a mercantile agent acting for that person. any sale. the buyer acquires a good title to the goods. 4) Negotiation: “When a Promissory Note. an assignment. On the other hand. but the seller's title has not been avoided at the time of the sale. Negotiation Assignment Negotiation can be done either by delivery or Written document duly signed by the by delivery and endorsement. pledge or other disposition of them. pledge or other disposition of them. so as to constitute that person the holder thereof. with the consent of the owner. Bill of Exchange or Cheque is transferred to any person. to any person receiving the same in good faith and without notice of the previous sale has the same effect as if the person making the delivery or transfer were expressly authorized by the owner of the goods to make the delivery or transfer. of the goods or documents of title under any sale. 4. Where you have the sellers in possession. the delivery or transfer by that person. 2. pledge or other disposition that would have been valid if the consent had continued is valid despite the termination of the consent. an assignment can be defined as. the delivery or transfer by that person. or under any agreement for the sale. Buyer in possession S. 30 (3) If a person having bought or agreed to buy goods obtains. The consideration in case of negotiation is The consideration has to be proved in case of presumed. or by a mercantile agent acting for that person. pledge or other disposition of them. if the person taking under the disposition has not at that time notice that the consent has been terminated.” The holder of the instrument also gets the right to recover the amount mentioned on it. if they are bought in good faith and without notice of the seller's defect of title. or of the documents of title to the goods. been in possession of goods. Negotiation may be carried out by delivery or delivery and endorsement. Sales under voidable title 28 When the seller of goods has a voidable title to them. transferor is mandatory for an assignment. to any person receiving the same in good faith and without notice of any lien or other right of the original seller in respect of the goods has the same effect as if the person making the delivery or transfer were a mercantile agent in possession of the goods or documents of title with the consent of the owner. 30 (1) If a person having sold goods continues or is in possession of the goods. or of the documents of title to goods. with the consent of the seller. when the possession of a negotiable instrument is transferred by writing a discrete deed of transfer. the instrument is said to be negotiated. pledge or other disposition of them. or under any agreement for the sale.(2) If a mercantile agent has. possession of the goods or the documents of title to the goods.

whereas in the case of assignment notice of the transfer must be given by the assignee to the debtor. However. Unit III . 2. But an assignee cannot do so. in good faith gets a good title. The Act governing negotiation of negotiable The activities concerning an assignment are instruments is the Negotiable Instruments regulated by the Transfer of Property Act. 3. Thus. Consideration is always presumed in the case of transfer by negotiation. If the title of the assignor was defective the title of the assignee is also defective. A holder in due course is not affected by any defect in the title of the transferor. He may therefore have a better title than the transferor. In case of negotiation a transferee can sue the third party in his own name.mandatory. coercion or misrepresentation. 1881 1882 The various points of distinction between negotiation and assignment are discussed below:1. where the title of any prior endorser is defective by virtue of fraud. is mandatory. the bonafide holder who has taken the instrument. except in the case of forgery because forgery conveys no title. Negotiation requires delivery only to constitute a transfer. Effect of negotiation: Negotiation involves transfer of ownership of the instrument from its holder to the other person. whereas assignment requires a written document signed by the transferor. In case of negotiation. notice of transfer is not necessary. Act. 5. In the case of assignment consideration must he proved. The assignee takes the instrument subject to all the defects in the title of the transferor. When the instrument has been transferred by negotiation the holder who has taken it for value gets good title to the instrument notwithstanding any defect in the title of the transferor. in case of negotiation the transferee takes the instrument free from all the defects in the title of the transferor. 4. when the holder is a holder in due course. Negotiation thus conveys a better title to the transferee than the transferor.

Take a decision in the aforesaid board meeting with regard to increasing the paid up capit al of the company to Rs. period of notice required for general meetings. Make an application to the Registrar of Companies for issue of a fresh certificate of incor poration with the changed name. 2. In the general meeting pass a special resolution for deletion of the restrictive condition of section 3(1)(iii) from its articles and for deletion of the word `Private' from the name of th e co-mpany. 5 lakhs if the existing capital is less than Rs. place and agenda for the general me eting to approve the draft notice of the general meeting to alter the Articles of Association and change the Objects clause as well in the Memorandum of Association along with the Articles of Association and consequently the name by passing a special resolut ion. with the Registrar. 5 lakhs or such higher amount as may be prescribed. File Form No. 7. alongwith the filing fee. Amend the Articles of Association in relation to quorum for general meeting. Convene a board meeting and decide the time. 9. File within 30 days of passing of the above special resolution . 6. 5. 11. 10. the prospectus in the form as per Schedule II or the statement in lieu of prospectus in the form as per Schedule IV . 4. Appropriate alterations will be made by the Registrar in the Memorandum of Asso ciation of the company immediately after issuing of fresh certificate of incorporation. Send 21 days clear notice of the general meeting in writing to all the eligible members of the attach along with the notice suitable explanatory statement for the proposed specia l resolutions. 8. Increase the number of directors from 2 to 3 and number of members to 7 in case the number of directors is less than 3 and members is less than 7. 3.5) Procedure for conversion of private company to public company Procedure 1. 23 within 30 days of passing a special resolution with the Registrar of Co mpanies with requisite fees prescribed under Schedule X of the Act. File minutes of the meeting in the minutes book within 30 days of the conclusion of the meeting. date. and mode of appointment/retirement by rotation of the . Such increase is not required if the existing private limited co mpany is registered under Section 25 of the Act.

12. It cannot sell shares to the general public in the open market. It's memorandum and articles of association is signed by at least seven persons.It is not required to obtain certificate of commencement of business in case of conversion of private company into public. Public Company          It's minimum number of persons is seven and the maximum is unlimited. It makes the use of the word limited after the name. 15. It can commence its business operation after getting certificate of incorporation. it sell shares to the general public in the open market. . The change of name on conversion will not affect any rights or obligations of the company and any legal proceedings by or against the company which was commenced in its former name. There is no legal restriction on director's remuneration. can be continued under its new name. It must file prospectus or statement in lieu of prospectus before allotment of shares. It requires both the certificate of incorporation and the certificate of commencement for its commencement. It may not have its own articles of association because it may adopt table 'A'. No consent is required to be obtained from the existing directors to act as such after con version. There are of least two directors and they need not retire by rotation. such consent is however is required for the subsequent appointment(s).director. It does not require the filling of the prospectus or statement-in-lieu of prospectus. etc. Hold a statutory meeting if the conversion is within 6 months of the incorporation of the company and comply with all the provisions with regard to holding of statutory meeting. Transfer of shares is not restricted and as such shares are freely transferable and are quoted in the stock exchange. it has at least 3 directors and they are subject to retire by rotation. bypassing a special resolution. File a copy of the amended Articles with t he Registrar of Companies. The filling of both memorandum and article of association is obligatory. It makes the use of private limited after its name. 13. Transfer of share is restricted in the articles of association. The memorandum of association and the articles of association is signed by at least two persons. 14. Difference between private and public company Private Company           It's minimum number of persons is two and the maximum is 50.

In the winding up. So preference share may or may not carry such other right as: (a) A preferential right to any arrears of dividend. Types of shares: According to section 86 of the companies act. It expresses a proprietary relationship between the company and the shareholder. the equity shares are entitled to the entire surplus assets remaining after the . Equity shareholders have the residual rights of the company. The directors cannot draw remuneration more than 11 percent of the net profit of the company. Equity shares: All shares which are not preference shares are equity shares. after all kinds of capital have been repaid. and II) In the event of winding up. there must be a preferential right to the repayment of the paid up capital. and (b) Equity shares. Preference shares: A preference share must satisfy the following two conditions: I) It shall carry a preferential right as to the payment of dividend at a fixed rate. A shareholder is the proportionate owner of the company. (b) A right to share in surplus profits by way of additional dividend. They may get higher dividend than preference shareholders if the company is prosperous or get nothing if the business of the company flops. (c) A right to be paid a fixed premium specified in the memorandum. and (d) A right to share in surplus assets in the event of a winding up. 6)Shares and its type A share is the interest of a shareholder in a definite portion of the capital. a company can issue only two types of shares: (a) Preference shares. These are two dominant characteristics of preference shares.

payment of the liabilities and the capital of the company. Cumulative and non-cumulative preference shares: With regard to the payment of dividend. preference shares may be cumulative or noncumulative. The participating preference shares may also have the right to share in the surplus assets of the company on its winding up. Such shares may be redeemed either after a fixed period or earlier at the option of the company. the dividend is only payable out of the net profits of each year. a company limited by shares. unless expressly provided in the memorandum or the articles or the terms of issue. Non-participating preference shares are entitled only to a fixed rate of dividend and do not share in the surplus profits. In the case of irredeemable shares. if the profits of the company in any years are not sufficient to pay the fixed dividend. to participate in the balance of profits with the equity shareholders after they get a fixed rate of dividend on their shares. Any ambiguous language in the articles will not be enough to make them non-cumulative. In the case of non-cumulative preference shares. If there are no profits in any year. Redeemable preference shares: According to section 80. The accumulated arrears of dividend must be paid before anything is paid out of the profits to the holders of any other class of shares. may issue redeemable preference shares. The preference shares are presumed to be non-participating. Such a right must be expressly provided in the memorandum or the articles of association of the company. . Preference shares are presumed to be cumulative unless expressly described as non-cumulative. 2. the capital is to be returned on the winding up of the company. In the case of cumulative preference shares. the arrears of dividend cannot be claimed in the subsequent years. in addition to preference dividend at a fixed rate. only subject to the following conditions: i) Such shares must be fully paid ii) Such shares shall be redeemed out of distributable profits or out of the proceeds of a fresh issue made for the purposes of redemption. A mere fact that the articles of a company confer on the preference shareholders a right to participate with the equity shareholders in the surplus profits does not necessarily mean that the preference shareholders are entitled to participate in the surplus assets also. 1. unless the articles confer right on the preference shares a right to participate in the distribution of surplus assets. on the preference shares the deficiency must be made up out of the profits of subsequent years. 3. Participating and Non-participating Preference Share: Participating preference shares are those shares which are entitled. if so authorized by its articles. The redeemable preference shares can be redeemed.

It is not that rich shareholders pay more on the shares and the poor share holders pay less on the shares.000. (ii) Unconditional Allotment: The allotment must be absolute and unconditional and also as per the terms and conditions mentioned in the application. This amount shall be treated as capital of the company and the provisions as regards reduction of capital shall apply. Where redeemable preference shares have been issued. and not according to the caste. Shares already issued cannot be converted into redeemable preference shares. Where a company fails to comply with these provisions. But it can be used to pay up unissued shares to be issued as fully paid bonus shares. The allotment should be unbiased. creed. a sum equal to the nominal value of the shares redeemed must be transferred to the „capital redemption reserve account‟. 1. iv) Where shares are so redeemed out of profits.iii) Any premium to be paid on redemption of such shares must be paid out of profits or out of the share premium account. (iv) Receipt of application money: Not less than 5% of the nominal value of the share has been secured and has been received along with the applications. If there is no company to offer then there would be no public to accept. religion. the balance sheet must contain a statement specifying what part of the capital consists of such shares and the earliest date on which the company has power to redeem the shares. . Here the company is the offertory and the acceptors are the general public. The amount credited to the account cannot be paid out to the shareholders as dividend. Redemption of preference shares is not to be taken as reduction of the company‟s authorized share capital. the company and every officer of the company who is in default shall be punishable with fine which may extend to Rs. (iii) Collection of minimum subscription amount: The minimum subscription amount as noted in the prospectus has been received within 120 days of the issue of prospectus. Redemption of redeemable preference shares shall be notified to the registrar within one month of redemption. All have to pay the same price on the shares. The following are the statutory conditions which need to be fulfilled: (i) Valid offer and acceptance: There should be a valid offer and acceptance for the allotment to be a valid one. Procedure for allotment of shares: (1) Fulfillment of statutory conditions which need to be fulfilled: The company secretary has to see that the statutory conditions regarding the allotment of shares are fulfilled before the Board proceeds to allot the shares.

The allotment committee will study the problem. (3) Board meeting for finalization of allotment formula: A meeting of the Board of Directors will be called to finalize the allotment formula. (ix) Allotment strictly as per documents issued: The Board of Directors have to make the allotment of shares strictly as per the documents issued which include the prospectus and the application form. The secretary also has to sign the application and allotment lists. (vi) Filing of prospectus with the registrar: A copy of the prospectus or statement in lieu of prospectus has been duly filed with the registrar and at least three days have elapsed after such filing before the allotment is taken up. the shares are allotted on a proportionate basis. The provisions made in the Memorandum of Association and the Articles of Association must also be given due consideration.e. the Board appoints an allotment committee to do the allotment work. For this. (4) SEBI's association with allotment work: A representative of SEBI need to be associated while finalizing the allotment formula. . It cannot be withdrawn until the company gets trading certificate or where such certificate is already received or till the minimum subscription amount is received. SEBI's nominee is necessary when the issue is over subscribed. If the issue is just subscribed or under subscribed. the company has to request SEBI to nominate a public representation for allotment work. the Board will do the allotment of shares. SEBI's nominee is associated while finalizing the basis of allotment. (5) Signature of chairman on application and allotment list: The secretary has to see that every sheet of application and allotment list is signed by the chairman. that the share applications are received and are ready for allotment. which is being prepared by the allotment committee. The subscription list must be opened for at least 3 days as disclosed in the prospectus. prepare a report and submit to the Board. If the shares are listed. (x) SEBI nominee: If the issue is over subscribed. The purpose is to see that the allotment is done on a fair and just basis. the allotment formula is to be finalized with the approval of the concerned Stock Exchange Authorities. The allotment also needs to be approved by a leading stock exchange. registered post with necessary details. (viii) Proper communication: The allotment must be duly communicated to the applicant through post i. (2) Appointment of allotment committee: The secretary informs the Board. but if the issue is over subscribed.(v) Deposition of application of money in a scheduled bank: All application money received along with the applications must be deposited in a scheduled bank. (vii) Time of allotment: No allotment of shares can be effected until the beginning of the fifth day from the date of issue of prospectus.

The blank form of letter of renunciation and letter of request for allotment along with the letter of renunciation duly executed and the original letter of allotment from the renounces. the secondary has to adjust the excess amount with the amount due on allotment. a document known as the "Return of Allotment". names and addresses of allotees. (10) Arrangement relating to letters of renunciation: To renounce means to give up. sealed. signed and distributed to all the allot-tees within three months after the allotment of shares. If an applicant has been allotted a smaller number of shares than the number applied for. (9) Collection of allotment money: The secretary has to make suitable arrangements with the Company's Bankers for collection of allotment money against the allotment letters. (13) Preparation of Register of members and issue of share certificates: The secretary has to prepare the Register of members from the Application and Allotment lists. The return of allotment contains various details on allotment of shares such as the nominal value of shares allotted. The secretary has to see that these documents are prepared and submitted in time to the Registrar. In case any allottee requests for a split of the allotment letter.(6)Resolution of the Board for allotment: The secretary has to see that the Board passes a resolution regarding the allotment of shares and authorizing him to issue letters of allotment and letters of regret. this is known as renunciation. amount paid or payable on each share and particulars of bonus shares and shares issued at discount. (11) Arrangement relating to splitting of allotment letters: Splitting means putting the shares in one or more names. He has to see that the shares certificates are properly printed. . The refunded application money is made to those share holders who could bot be allotted shares. the secretary has to make necessary changes in the Application of Allotment list in order to enter the names of the new allot-tees. (7) Issue of letters of allotment and letters of regret: After the Board's resolution to allot shares. Then he will send allotment letters to those who have been allotted shares and regret letters to those who could not be allotted shares. the secretary places such a request before the Board for approval. Certain applicants who are being allotted shares do not want them. so they return the shares back to the company. the secretary prepares the allotment list. (12) Submission of return of Allotment: Every company whether public or private and having a share capital ans within 30 days of allotment is required to send to the Registrar. Once the Board approves the splitting of the allotment letter. the secretary has to enter the details of the split in a separate list of split allotments and issue the necessary 'split' letters. The refund order is sent along with the letters of regret. He has also to see that the share certificates are issued against the letters of allotment. (8) Refund / Adjustment of application money: The secretary has to make suitable arrangement for the repayment of application money sent by the applicant.

State Commission and the National Commission are vested with the powers of a civil court under the Code of Civil Procedure while trying a suit in respect of the following matters:1. The Council meets as and when necessary but at least one meeting is held in a year. and (b) Other official and non-official members representing varied interests The State Council meets as and when necessary but not less than two meetings must be held every year. and 6. issuing of any commission for the examination of any witness. 2. 3. the requisitioning of the report of the concerned analysis or test from the appropriate laboratory or from any other relevant source. any other matter which may be prescribed.Unit IV 7)Consumer Protection Councils The interests of consumers are enforced through various authorities set up under the CPA. 5. . The CPA provides for the setting up of the Central Consumer Protection Council. State Consumer Protection Council The State Council consists of :(a) The Minister in charge of Consumer Affairs in the State Government who is its Chairman. and (b) Other official and non-official members representing varied interests The Central council consists of 150 members and its term is 3 years. Powers of the Redressal Agencies The District Forum. the reception of evidence on affidavits: 4. the summoning and enforcing attendance of any defendant or witness examining the witness on oath. the State Consumer Protection Council and the District Forum Central Consumer Protection Council The Central Government has set up the Central Consumer Protection Council which consists of the following members:(a) The Minister in charge of Consumer Affairs in the Central Government who is its Chairman. the discovery and production of any document or other material producible as evidence.

Commission and the National Commission have the power to require any person :(i) To produce before. For all practical purposes the words "shareholder" and "member" are used interchangeably because in the normal course a shareholder will also be a member and a member will also be a shareholder.Under the Consumer Protection Rules. papers. a "member" denotes a person whose name appears on the Register of Members. documents etc. we may come across a few exceptional cases where a shareholder may not necessarily be a member and a member may not necessarily be a shareholder. Difference between a Member and a Shareholder S. Contrarily. a transferee or the legal representative of the deceased may be a shareholder but he may not be member until he gets his name entered in the register of members. (iii) to dismiss frivolous and vexatious complaints and to order the complainant to make payment of costs. Such authorised officer may also seize books. the transferor or the deceased person is a member so long as his name is on the register of members whereas he cannot be termed a shareholder. or documents are kept if there is any ground to believe that these may be destroyed. provided the seizure is communicated to the District Forum / State Commission / National commission within 72 hours. papers. documents or commodities if they are required for the purposes of the Act. On the other hand. (ii) to issue remedial orders to the opposite party. 8) Members of a company On the other hand. commodities. Similarly. (ii) To furnish such information which may be required for the purposes to any officer so specified. But if looked at from a closer angle. They have the power to :(i) To pass written orders authorising any officer to exercise power of entry and search of any premises where these books.000 to the opposite party. falsified or secreted. not exceeding Rs. the District Forum. a holder of a share warrant is a shareholder but not a member as his name is removed from the register of members immediately after the issue of such share warrant. companies limited by guarantee or unlimited companies having no share capital will have only members but no shareholders. the agency concerned may order the retention thereof or may return it to the party concerned. mutilated. and allow to be examined by an officer of any authorities. altered. 1987.no Shareholder 1 Is a member Member May not be a shareholder because the company may . under its custody for the purposes of the Act. such books of accounts. documents or commodities as may be required and to keep such book. For example. On examination of such documents or commodities. 10.

2 3 4 not have a share capital Person who owns a bearer share warrant is a Struck off from the list shareholder legal representative of a member Applies for registration No share are allotted to a subscriber to the Subscriber to memorandum memorandum a Membership termination: (1) A member may withdraw from membership of the company by giving 7 days‟ notice to the company in writing. (2) Membership is not transferable. . (3) A person‟s membership terminates when that person dies or ceases to exist.